Background and Aim: To assess the cost-effectiveness of hepatitis C virus treatment with pegylated interferon alfa-2a and ribavirin in current and former people who inject drugs (PWID). Methods: A decision analytic model simulated the lifetime costs and outcomes of four treatment options: early treatment with mild fibrosis, standard treatment with moderate fibrosis, late treatment with compensated cirrhosis, and no treatment. Treatment modalities were simulated across current, former, and never-injector cohorts of 1000 hypothetical patients with chronic hepatitis C virus. The main outcome measures were incremental costs ( AUD) per quality-adjusted life years (QALYs) gained, and incremental cost-effectiveness ratios (ICERs) were calculated for each cohort. Results: Treatment of current PWID during mild fibrosis resulted in a discounted average gain of 1.60 QALYs (95 confidence interval 0.93-2.26) for an added cost of 12723 ( 11153- 14396) compared with no treatment, yielding an ICER of 7941 per QALY gained ( 6347- 12017). Former PWID gained 1.80 QALYs (1.29-2.33) for 10441 ( 8843- 12074) for early treatment compared with no treatment, resulting in an ICER of 5808 per QALY gained ( 5189- 6849). Never-injectors gained 2.33 QALYs (1.87-2.80) for 9290 ( 7642- 10912) compared with no treatment-an ICER of 3985 per QALY gained ( 3896- 4080). Early treatment was more cost-effective than late treatment in all cohorts. Conclusions: Despite comorbidities, increased mortality, and reduced adherence, treatment of both current and former PWID is cost-effective. Our estimates fall below the unofficial Australian cost-effectiveness threshold of AUD 50000 per QALY for public subsidies. Scaling up treatment for PWID can be justified on purely economic grounds.